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Okay, from our studios in Los Angeles and Tampa. This
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is Green Tagged Theme Park and thirty. I'm Philip and
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I'm joined as always but my delightful co host Scott
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Swinson of Scott Swinson Creative Development. On Green tag we
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look at the top news each week and we explain
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why it matters to business professionals in the theme, entertainment
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and attractions space. And this week we have another update
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to cover.
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Six Flags, isn't it. We've got six Flags to talk
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about it again? Got it? More six flags stuff?
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Here we go, and then we're going to get to
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the Sesame workshop debacle, which came to us requested multiple
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times from listeners last week, so thank you for that.
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But it was announcement after we stopped recording, so we
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literally we just missed it.
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But we'll get that. That was it was.
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I was just I was just saying, okay, bye, Philip,
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we'll see, Oh Sesame's done something. Oh oh so yes,
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we'll cover it. No panic, we'll cover it today.
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We'll cover it.
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So let's start off. We'll just do a quick update here.
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This is it's just the six Flags thing. I just
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think it's fascinating at this point where just last week
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we talked about the brand ambassador and Travis kelce and
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all that was going on. And remember that the whole
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reason that Travis kelce was brought in is he was
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brought in with Jana, which is one of the private
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equity groups, the Jana Partners, they have nine percent to
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take and so Travis kelcey was wrapped into that, and
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then he was suggested as the brand ambassador, and they
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announced this official partnership last week and all these marketing
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things and everything, and then literally a week later, just
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a week later, Jana Partners is now pushing six Flags
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to explore a sale. And they sent a letter which
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writers got a hold of apparently, and they sent the
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letter to the board urging the company to explore a
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sale and replace the board chair Marilyn Spiegel.
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So Spiegel was.
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Just nam chair in January, so she's only been there
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for a few months, but she's then director since twenty
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twenty three. So it's what they said here is is
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it is now in the best interest of shareholders for
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the company to reverse course and engage with known buyer
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interest in six Flags. We have witnessed an alarming pattern
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of board dysfunction and disjointed decision making that has become
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impossible to ignore. So I think we all probably agree
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with that part. But I think where we probably disagree
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with is what is best right now. And I think
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we've talked about last week or that that Scott and
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I've been maintaining for several chapters of the story is
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that they do need the time and the space. And
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we talked about John Riley and everything he was doing,
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and we're like, look, there is a ray of hope
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here where if you could sell enough parks to relieve
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a little bit of the debt and give yourself a runway,
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and then Riley can go through and make some of
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the changes that he's been talking about, and you can
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write the ship and fix the experiences and bring in
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all these breat of food and modernize some of these parks.
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You could see, you know, hope for the future. But
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to me, this would derail all of that because going
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into a sale and all, and it's it's crazy, but
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it is also the playbook, right. So that is kind
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of the business model of an activist hedge fund, where
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they buy a stake in a company that they think
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is undervalued and they push for changes and then they
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just like exit and they don't really want I don't
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think that they want to sit here with six Flags
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for a decade to kind of watch as they revitalize
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the brand or not. And it's just interesting the timing
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wise that it came a week after the Kelsey announcement.
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And my only guess on that is that they announced it.
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It's like the Kelsey thing didn't really help the stock
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as much as they thought it would. I think is
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the problem is that they announced a brand partnership, they
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didn't seem to do much, were raise valuation much, and
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so now they're like, well, we just need to get out,
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so we're pushing you to sell.
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What do you think, Scott.
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Well, I think it's interesting because they do in their
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statement to say that they still support CEO John Riley. Yes,
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the target is the board, not the CEO. So what
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that suggests to me is there is someone or ones
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on the board that are holding onto the old ways
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and I'm not sure whether Jenner really wants them to sell.
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You know, when you say sale, is that sale of
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the whole company? Is that like sell all of the
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new six Flags to x y Z Holding Company or
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is it to SA to sell off additional parks. I
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think I think there is if I'm reading between the lines,
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and this is pure speculation, But if I'm reading between
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the lines, when they say things like we are targeting
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the board, we want the chair of the board to
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be replaced, but we still support the CEO, that means
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that the or that suggests to me that the holding
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company that Jenna is looking at it going. The problem
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is not the way the parks operate. The problem is
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the board, which is steering them in the wrong directions
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or dragging their feet so that they can't make the
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changes quickly enough. You know, Bard approval is usually like
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the kiss of death for new ideas when when you
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have when you're in a park and you have to go, okay,
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we have to go through board approval. And that doesn't
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matter whether you are a huge chain like six Flags
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or an independent nonprofit that has a board. It is
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the board that can put the kaibosh on pretty much
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anything just by saying no, we don't like it. Because
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the board is the organization that can keep or get
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rid of pretty much anyone. So everybody thinks that the
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board is sort of a a neutral party but they're not.
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They have they have a great deal of clout in
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these kinds of organizations, and you know, the are larger
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the organization, the more cloud they have. So it sounds
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to me like, uh, there is a co I won't
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even say a conflict. There is a perceived conflict between
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the board and the operations team, and they are not
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the same thing. And so I just I find it
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very interesting that they make a point to say that
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they still support John, but the it's the target is
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the board, not the CEO. So that again just just
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that little little tiny tidbit alone kind of tips their hat.
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I don't I don't know whether they're the idea of
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pushing for a sale. I don't know whether. I don't
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know what exactly that means. So whether it means we
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should sell off more parks or we should sell the
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whole company, make a quick buck and get out, I
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don't know which it is.
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Well, I'm not sure that it could be the I
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agree with you entirely, and I'm not sure it could
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be the sale of the entire thing, because who has
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the money to at this point to buy something with
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that amount of leverage, debt and all these properties and
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it's I mean, it's not gonna be Dizzy, It's like Universal,
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it's not gonna be Hersion, It's I mean, who is
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it going to be? It probably would be another private
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equity or another place who And then you're back into
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the same doom loop basically of of you know, people
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who are who are not willing to make the long.
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Term strategic investment to turn the entire chain around.
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Unless unless it is either Morale or Kadia or yes,
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that could be one of those organizations. And I don't know.
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I can't remember the name of the actual company that
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owns six Flags in Kadia or that owns Kadia City,
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but they may be very interested in buying the six
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Flags out right, I don't know that for a fact,
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but they might. But I think, I think in my
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own personal opinion, And again I am not a chairman
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of a board, nor have I ever been a chairman
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of a board for a theme park. But in my
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experience in working on the ground and seeing how the
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board and the c suite operates and the people in
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the trenches operate, I would think I don't think additional
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sales are a bad idea. I think getting rid of
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a few extra parks, you could give them some capital
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and help them reduce that debt. They're already so far
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in a hole that if they don't get a few
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more shovels, they're going to stay there, so no matter
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how hard they did. So I'm kind of assuming that
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may be it, and I think it's more of a
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I think it's more of a threat to get the
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board to shape up and and get behind the project.
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But again, this is all conjecture. I can't say that
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inn but I usually usually when an investment firm decides
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we need to sell, it's pretty much there. They don't
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think there's anything salvagable. But the fact that they still
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support John Riley and don't support the board, that suggests
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that they've seen some sort of friction in there that
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they don't want.
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Well, like they said, dysfunction, I mean the high level
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of dysfunction which they said, which I think we did
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allude to a little bit. Remember when we talked about
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the first earnings call that John Riley had where he
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had toured all the parks and he was bringing up
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all these perfectly reasonable observations. I think you and I
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both were like, the weird thing here is that these
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are still problems right that no one has really and
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that could be an indicator again of this dysfunction, like
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you said, on the board, Like could just be whatever's
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happened on the boards preventing them from making decisions and
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they're kind of hindering the CEO. And I think you
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had said even at that time, the real question is
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whether or not the board is going to allow the
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CEO to do what you know, give him the leeway
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to do what he needs to do and maybe do
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what they hired him to do, do what they hired
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him to do. And maybe this is Jenna saying, we
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don't believe they're going to so we need to pull
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the rip chord. But that's I can't imagine that's going
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to I think. To me, I think the like you said,
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the good part here is that if the board is
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genuinely dysfunctional, like if they're actually dysfunctional, which there's reasonably
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they are, then something like changing up the chair and
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what that would actually help Riley. But the sale I
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don't think would. So I feel like them pushing for
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a sale or pushing for this aggressive timeline isn't helpful
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right now. But the board shakeup could be if the
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board is preventing Riley from making changes right well.
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And the threat of sale, the threat of sale could
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also be a tool to get the board in line.
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Yep, that's right, that's right.
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Because again they own nine percent, there's still ninety one
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percent that they would have to or at least what
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is it, forty forty two percent that they would have
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to convince in order to make a sale possible, assuming
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that you just need to smell a simple majority.
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That's right, that's right. They But of course it's not.
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It's always like you said, they always have a lot
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of sway because they're going to the other shareholders, of course,
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and they're and they're kind of.
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Right, they're saying, do you really trust? And I don't
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think there's I don't think it would be the least bit.
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I don't think it's I don't think this is me
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just being the conspiracy theory guy. But I'm sure they've
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already somebody in Jenna has already reached out, because they've
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already said they're interested buyer. Well, how would you know
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that if you hadn't reached out already. Yeah, so there's that. Yeah,
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I was wondering that too.
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And I thought it was just so abrupt that I
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was wondering if it's something like you said. I had
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thought about the Middle East, but I wasn't sure about Well,
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it's all conjecture. But anyway, anyway, they're Aside from that,
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there's the structural problem at six Flags, which we have
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all talked about since the merger started, right.
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The whole structural problem.
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And I want to point to an article from theme
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parkinsider Robert Niles wrote there which I thought was extraordinary.
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I mean, I love Robert's work, but I also love
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how he was able to condense everything again a few
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simple terms. But I'm going to quote here from his
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recent article where he says six Flags is fundamentally misaligned
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with the current market, both on the demand and supply sides.
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It has too many parks and locations that are not
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experiencing stro economic growth. The attractions that it now offers
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across its chain are too often designed for a previous generation.
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They do not meet the needs of the current demographics.
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Nor are Six Flags parks designed for warming and extreme weather.
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Market leaders Disney Universal have long been aggressive with price increases,
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positioning themselves as week long vacation destinations. That leaves an
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opportunity in the market for company like six Flags to
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reach consumers who feel priced out by Disney and versal,
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or are looking for only daytrip rather than long vacation.
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But of course, he said. He goes on to say
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that Six Flags parks are running with one train operations
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on their major coasters, leading to long way times frustrated visitors.
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That's not a way to create positive guest experience and
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drive the long term value six Flags. They face many challenges,
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including billions of dollars in debt. The last thing the
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company needs to push deliver more value for shareholders over
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a period of just a few months. They must invest
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at the detriment of its short term ROI in order
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to correct these misalignments and the lock long term potential.
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That's assuming that the goal of the investors is the
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success of the parks. That's right, Which is not right case?
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Which is not always the case. It may be the case,
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I don't know, but that's not always the case. Quite
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often the case is I see a chance for me
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to get in, make a quick buck and get out.
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That's right, I'm going to buy this, you know, I
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quite honestly, I understand that completely. I've done that when
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I buy pieces of art, I know that this is
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something that's going to be really popular. So I'm going
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to work my butt off to get a copy of
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it when it first comes out. It's a limited edition thing,
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it'll be gone. Once it's gone, I know I can
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double the price, and I can do that overnight. So
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I understand that mentality. I think though that everything and
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I and I also want to make it very clear,
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I am not disagreeing with Robert at all. I agree
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one hundred percent. I think it's very important to recognize
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that the and and all of this stuff is the
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stuff that we've said. You know, my my favorite combat
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is the one one train operation. You know this is
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you know that once once any park, once any park
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goes down to the bare minimum it takes to keep
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the ride open, that they are hurting and they don't
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have a plan, they don't have a solution. That's right,
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and six Flags is not the only park we're seeing
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that in either. So you know, this kind of goes
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back to my The mega parks, unless they're tied to
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a giant brand, the big theme park, the destination theme
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parks are going by the wayside, unless they're either Disney
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or Universal. With this point, and because they're tied to
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iconic ips that are and they have the money or
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have to invested the money to make them so incredibly
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bold and robust. You know, I have always said with
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and I used to say this about Paramount Parks and
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you know all the other other chains, if they were
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able to use their to use their their numbers of parks,
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to use their their the clout of having buying power
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to create the best local theme park they could. To me,
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that seems to be the approach. Don't try to make
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it a destination park, be the park that families want
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to go to because it's that local park. Because look
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what happens the moment they go to close any of
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the six Flags or or which are now you know
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some of the arm Cedar Fair parks as well. The
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moment they go to close them, it's like, oh no,
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I grew up there. That's what let's say, we can't
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blah blah blah blahah. So lean into that. Lean into that.
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Don't try to homogenize everything so that it's going to
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be one giant six Flags monster that has fifteen hundred
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legs and different locations all around the country. Make it
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so that each park can be unique in its own way,
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that that follows what the local market wants, and that
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way when people go to visit these places. I mean,
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I know so many theme park nerds that love to
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visit places just to go and ride a coaster because
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it's been there since, you know, the twenties. It's it
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boggles my mind that everyone tries to compete in the
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same way. You know, when when when Bush Gardens in
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Tampa says we're going to do this because Universal did this,
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and Universal used to say we're going to do this
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because Disney did this, And now six Flags is going
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to say we're going to do this because Universal and
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Disney and Bush Gardens have done this. That's ridiculous. There's
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the people who've been doing it for a while not
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only have a leg up from a timing standpoint, from
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a research standpoint, but also from a financial standpoint. So
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recognize that you can use best practices to create unique
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experiences around the country.
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I agree with all that. I think it also dovetails.
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I don't think that's in conflict with what Robert is
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saying at all. And I think it's more a question
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of some of this, like you were alluding to some
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of the you know, the one train operations is.
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One symptom of it, of the cost cutting and whatnot.
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But I think a lot of it's how do you,
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like I guess Scott from like operations perspective, Like, like,
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how I think that's that's a pretty big shift that
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would need to happen at some of these locations to
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make them to kind of turn them from where they're
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at now, which is kind of a bad guess experience
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in bad creature comforts, which we always talk about the
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creature and then we hear that all the time creature
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comforts are bad. Lines are long, no place, blah blah
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blah blah blah, on and on on, food, et cetera.
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Corporate needs to so corporate needs to do a corporate
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wide investment of here's X amount of dollars, here's how
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we're going to allocate the money. Here's X amount of
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dollars for you to put benches in your park that
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are shaded, with water available.
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And unestaffing, all that kind of stuff like making that it's.
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Well, you got it, I mean, you got you can't
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do everything at once. You can't do everything at once.
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You have to make it so that you know. And
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this is why I was so excited to hear that
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John had gone out and visited all the parks. I
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talk about John like I know, like we're best buddies.
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We're not. I worked with him for a couple of years.
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That's I don't I don't mean to be that name
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dropper guy, but but I will be honest. If I
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ran into him in the like, if I ran into
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him at app, I'd walk up to him and go, congratulations, John,
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I here, you're you're doing really well for yourself. He
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would go, and who are you?
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But anyway, Uh, he's that guy that talks about me
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on YouTube.
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On YouTube, Yeah, he talks way too much about me
359
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on YouTube. But but the thing but he always talks
360
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nice about me, So that's the good thing. But I know,
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I loved it when when John Riley said I'm going
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to all the parks, I'm going to listen to what
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the frontline people have to say. That seems to me
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to be in line with what I'm saying. And I
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agree what I'm saying is not in uh in not
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in not in conflict with with Robert's observations in the article.
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I'm saying is if you are truly interested in trying
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to make the parks better and make them succeed and
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not just get a quick buck, this is the approach
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that I would recommend taking.
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But of course Janet just wants a quick buck, which
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we've known since then to assume that. Yeah, but that's
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been their systemic problem. I think that's that's always a
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systemic problem when you have this type of investment in
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the parks, is you know, it's not necessarily aligned with
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the best long term strategy. They want returns faster, which
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isn't necessarily possible when you have to embark on this
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turnaround strategy over time. One thing I wanted to mention
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really quick. I know we're running time in this one,
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but I did go to Knots recently, which I haven't
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gone in quite a long time, and I went for
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their Boys and Berry festival, and I think everything that
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you mentioned, I think I noticed, and everything even that
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Robert mentioned, and I mean not in the bad way,
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actually the good way. So the good staff interactions that
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I had were the ones that were older, that were
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senior employees or older much older employees who had been
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there for a long time, and they were patient and
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nice and they made small talk, and that those were
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all great. There was still you know, college people sprinkled around,
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but everybody had a good culture. They had the good
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a good Knots culture. They had a good attitude you had.
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I actually I interviewed a lot of people. I'm writing
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an article about the experience, but I interviewed a lot
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of the other guests that were there, and everything you're
396
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saying is exactly what I heard time and time again
397
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from the guests that were there. They said that this
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is to them, it's cheaper than Disney. It feels like
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00:21:02.920 --> 00:21:05.319
going to a park. It just feels like they have
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a pass.
401
00:21:05.880 --> 00:21:06.240
They like.
402
00:21:06.319 --> 00:21:08.160
They like to show up. They like to eat and
403
00:21:08.240 --> 00:21:10.599
hang out and eat the food. The local vendors that
404
00:21:10.640 --> 00:21:12.680
they bring in for the Boisonberry Festival, I talk to
405
00:21:12.720 --> 00:21:15.160
them as well. They're all local artists and local craftsmen
406
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and they love being able to go to Knots and
407
00:21:18.920 --> 00:21:23.000
make something sell crafts. I ran into a woman even
408
00:21:23.000 --> 00:21:27.359
who had sown a Boisonberry themed dress to wear to
409
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Notts to come to the festival, so that that you know,
410
00:21:32.039 --> 00:21:34.200
basically the way I would describe it as the Boisberry
411
00:21:34.240 --> 00:21:38.359
Festival feels like a small town festival put on by
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a small town. It just happens to be in a
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theme park.
414
00:21:40.799 --> 00:21:44.000
Yep, yep. And you know, because we have fewer and
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fewer of these community gathering spaces, it is an opportunity
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for these parks to become those That's right.
417
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That's right, and I think that that is that is
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the opportunity if you could do that at every park
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that six Flags has. That's that's the straight Okay, anyway,
420
00:21:57.839 --> 00:22:00.880
we got to move on. Okay, okay, let's try and
421
00:22:00.880 --> 00:22:03.960
wrap this last one up here. Sesame Workshop is suing
422
00:22:04.079 --> 00:22:06.839
United Parks to terminate the licensing agreement. So basically, here's
423
00:22:06.839 --> 00:22:09.799
what happened. Sesame Workshop filed a federal lawsuit in the
424
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Southern District of New York on March twelfth against SeaWorld,
425
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and they are saying they're asking the court to terminate
426
00:22:16.599 --> 00:22:21.160
the licensing agreement, not just to pay the damages. So
427
00:22:21.240 --> 00:22:24.480
currently the licensing agreement runs through December twenty thirty one.
428
00:22:25.039 --> 00:22:27.799
The relationship itself is over forty five years old, and
429
00:22:28.799 --> 00:22:32.920
United Parks's argument, so Sesame is arguing that they stopped
430
00:22:32.960 --> 00:22:36.880
paying in September, and before that they had taken a
431
00:22:36.920 --> 00:22:39.680
long time and had gone over previous payments that they
432
00:22:39.720 --> 00:22:42.279
were doing, and so they're currently not paying. This is
433
00:22:42.279 --> 00:22:45.079
what they are currently not paying, and so they're asking
434
00:22:45.160 --> 00:22:47.480
to terminate the agreement not just because they're currently not paying,
435
00:22:47.480 --> 00:22:50.880
but because of the late how late they were on
436
00:22:51.000 --> 00:22:52.039
previous payments.
437
00:22:52.519 --> 00:22:53.440
United Parks.
438
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Their argument is that because Sessing Workshops and distribution deal
439
00:22:57.160 --> 00:22:59.960
with Warner Brothers to release new episodes on HBO MAC
440
00:23:00.200 --> 00:23:03.720
wasn't renewed, that Sesame failed to invest in its brand
441
00:23:04.160 --> 00:23:07.920
and exposure, reputation had weakened, and that gave United Parks
442
00:23:07.920 --> 00:23:13.000
cause to terminate. Okay, but just as a as a
443
00:23:13.359 --> 00:23:16.720
just to clarify though that Sesame Parks is still operating
444
00:23:16.720 --> 00:23:22.640
the Sesame that United Parks is still operating the Sesame
445
00:23:22.720 --> 00:23:25.599
branded parks and attractions like right now, like Sesame Place
446
00:23:25.680 --> 00:23:28.519
San Diego is going to open on March twenty seventh,
447
00:23:28.960 --> 00:23:31.079
and they're not paying for the license, so like they're
448
00:23:31.079 --> 00:23:35.359
opening lands that they're not paying a license EEV before.
449
00:23:35.440 --> 00:23:38.160
So that's just that's the thing. They stopped paying in September.
450
00:23:38.519 --> 00:23:43.599
So I put a whole timeline here, you know, for
451
00:23:44.039 --> 00:23:49.160
for reference, But previously, in twenty twenty four, a federal
452
00:23:49.240 --> 00:23:52.200
judgment Orlando had upheld the arbitation ruling ordering United Parks
453
00:23:52.240 --> 00:23:55.119
to pay eleven point four million including interest, and they
454
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didn't pay until just this last October, so they took
455
00:23:59.599 --> 00:24:01.000
a year or after that was done.
456
00:24:01.039 --> 00:24:02.880
So I don't know.
457
00:24:02.920 --> 00:24:07.200
And this all comes we reported just recently on their
458
00:24:07.279 --> 00:24:10.240
latest earnings call, right, And remember we talked about the
459
00:24:10.279 --> 00:24:14.960
CEO where he was pushed about the expenses and how
460
00:24:14.960 --> 00:24:16.279
he was going to curve them and how he'd been
461
00:24:16.319 --> 00:24:18.400
over last time and blah blah blah, and he kind
462
00:24:18.400 --> 00:24:21.559
of gave a dodgy answer and all this, and and well, yeah,
463
00:24:21.599 --> 00:24:24.039
I mean, one way to curb your expenses is to
464
00:24:24.079 --> 00:24:28.359
not pay licensing deals that you apparently have to pay
465
00:24:28.519 --> 00:24:31.480
as ordered by a court. I guess what.
466
00:24:32.359 --> 00:24:34.680
And so.
467
00:24:39.240 --> 00:24:42.079
Yeah, So the Session Workshop statement here is that United
468
00:24:42.119 --> 00:24:45.039
Parks and Resource has repeatedly failed to honor its contractual obligations,
469
00:24:45.079 --> 00:24:47.759
leaving Session Workshop no choice but to pursue litigation to
470
00:24:47.839 --> 00:24:50.480
protect our brand and trust the families in it. And
471
00:24:50.640 --> 00:24:53.400
United Parks just said that they're looking forward to setting
472
00:24:53.400 --> 00:24:55.960
the record straight in court, which I'm not sure how
473
00:24:56.000 --> 00:25:01.519
else you can set it because anyway, to me, okay,
474
00:25:02.079 --> 00:25:04.279
this is not a financial show. I'm not an attorney,
475
00:25:04.319 --> 00:25:10.079
so there's my disclosure. But I kind of don't see it.
476
00:25:10.119 --> 00:25:12.920
Seems like, you know, Parks is trying to just delay
477
00:25:13.039 --> 00:25:16.680
this because they're trying to do like we talked about
478
00:25:16.720 --> 00:25:19.759
some sort of we talked about this buybacks they did.
479
00:25:19.759 --> 00:25:22.640
We've talked about all their weird financial machinations and them
480
00:25:22.680 --> 00:25:26.839
trying to increase the share or decrease the shared delution
481
00:25:27.319 --> 00:25:29.519
before they potentially sell land. So I feel like they're
482
00:25:29.519 --> 00:25:31.599
just trying to punt this down so they can put
483
00:25:31.680 --> 00:25:34.799
more money to that plan so they can sell land
484
00:25:35.000 --> 00:25:37.279
and get some sort of return on it and maybe
485
00:25:37.279 --> 00:25:40.720
then they'll pay it. But I don't Again, i'm not attorney,
486
00:25:40.720 --> 00:25:44.559
but I don't see how this is not illegal. Like
487
00:25:44.599 --> 00:25:46.880
they're opening a land for which they are supposed to
488
00:25:46.920 --> 00:25:50.200
be paying IP and they're not paying it. And maybe
489
00:25:50.599 --> 00:25:53.240
there's something in that contract that says that Sesame is
490
00:25:53.279 --> 00:25:57.720
required to invest periodically. Maybe maybe that's in there, sure,
491
00:25:58.119 --> 00:26:03.960
but okay, go ahead, No, that's that's exactly what I
492
00:26:04.000 --> 00:26:04.519
was gonna say.
493
00:26:04.559 --> 00:26:06.920
Neither of us have seen the contract. Neither of us
494
00:26:06.920 --> 00:26:10.440
have seen the agreement. And if if it does say that,
495
00:26:10.559 --> 00:26:13.400
you know, over over the next X number of years,
496
00:26:13.839 --> 00:26:17.440
case Sesame, you know, with with public television, Sesame was
497
00:26:17.440 --> 00:26:22.680
was was dying, it was going away, and so in less,
498
00:26:22.960 --> 00:26:27.039
if there if there was something in that that agreement
499
00:26:27.200 --> 00:26:30.319
that says Sesame agrees to invest x amount of dollars
500
00:26:30.400 --> 00:26:33.359
or time or whatever in the ongoing distribution of the
501
00:26:33.359 --> 00:26:37.279
Sesame Street material and spreading of the Sesame Street brand,
502
00:26:37.720 --> 00:26:41.559
that may be something that United Parks could go, excuse me,
503
00:26:42.119 --> 00:26:44.359
you haven't quite you haven't quite lived up to your
504
00:26:44.440 --> 00:26:48.759
end of the bargain. That said, it is still not
505
00:26:48.880 --> 00:26:50.400
an excuse to just not pay.
506
00:26:50.880 --> 00:26:51.400
That's right.
507
00:26:52.000 --> 00:26:53.839
It is one of those things that if if that
508
00:26:53.920 --> 00:26:56.680
is indeed the case, then say then make it clear
509
00:26:57.039 --> 00:26:59.200
you know we are we are filing suit against you
510
00:27:00.200 --> 00:27:03.440
Sesame for not living up to your end of the bargain,
511
00:27:03.720 --> 00:27:06.440
assuming that was part of the original agreement, Assuming that51200:27:06.519 --> 00:27:09.759
was part of the original deal, which it would not51300:27:09.839 --> 00:27:12.279
be uncommon to have that sort of clause in there51400:27:12.319 --> 00:27:14.119
to say, you know, because because there are you know,51500:27:14.200 --> 00:27:16.319
there's are there there are those IP holders who are51600:27:16.359 --> 00:27:18.480
just like, yeah, I own the rights to this, but51700:27:18.519 --> 00:27:20.319
I don't really give a crap whether anybody really sees51800:27:20.359 --> 00:27:22.519
it or not. I just want somebody to buy it51900:27:22.519 --> 00:27:25.039
and put it in their parks. Okay, great, Then the52000:27:25.039 --> 00:27:28.000
parks invest a ton of money, because the investment that52100:27:28.000 --> 00:27:31.240
that all of the United Parks have made, not just52200:27:31.279 --> 00:27:32.960
in the sea World or not just in the the52300:27:32.960 --> 00:27:36.319
Sesame specific locations, but in all of the SeaWorld parks52400:27:36.359 --> 00:27:40.680
and the Bush Gardens parks is substantial. You know, there's52500:27:40.720 --> 00:27:46.359
a there's a hard goods capital investment there. And so52600:27:46.839 --> 00:27:49.599
if if Sesame were to all of a sudden say52700:27:50.240 --> 00:27:52.079
here's a cease and desist, or get a judge to52800:27:52.079 --> 00:27:55.200
say here's a cease and desist, yeah you can't. You52900:27:55.240 --> 00:28:00.720
can't operate anything that has any of our logos, characters, names,53000:28:00.799 --> 00:28:04.759
et cetera. That would affect affect every single park in53100:28:05.000 --> 00:28:11.640
the United Parks chain. So this could be a big deal.53200:28:11.839 --> 00:28:14.160
I mean, this could be a really big deal. I53300:28:14.160 --> 00:28:17.000
don't know whether it is a I know, Philip, you53400:28:17.240 --> 00:28:18.680
see it as a little bit more cut and dried53500:28:18.759 --> 00:28:20.960
than I do. I don't think it's right, but I53600:28:21.000 --> 00:28:25.000
don't think it's as cleanly right and wrong as we53700:28:25.200 --> 00:28:26.960
as we see it as because we don't know what53800:28:27.000 --> 00:28:28.039
the original agreement was.53900:28:28.799 --> 00:28:29.559
I agree with that.54000:28:30.039 --> 00:28:33.000
I think to me, there's almost two different issues here,54100:28:34.079 --> 00:28:37.200
maybe three different issues agree. Like one is, we don't54200:28:37.200 --> 00:28:39.720
know what the contract is, so we'd actually know if Sesame,54300:28:40.440 --> 00:28:42.559
if Sessme Workshop is fulfilling their or not.54400:28:42.640 --> 00:28:43.200
We don't know that.54500:28:43.559 --> 00:28:46.079
But what we do know is that a judge ordered54600:28:46.119 --> 00:28:48.400
them to pay eleven point four million within a timeline54700:28:48.400 --> 00:28:52.079
and they ignored that. And there's also the original timeline.54800:28:52.119 --> 00:28:53.440
What was the original timeline.54900:28:53.079 --> 00:28:55.920
The judge ordered they were supposed to pay within I55000:28:55.960 --> 00:29:00.480
think thirty days, and they took a year, okay, file55100:29:00.599 --> 00:29:03.839
for any extensions No, apparently not, and they had to55200:29:03.880 --> 00:29:08.319
pay late for it. And then they also had to55300:29:08.319 --> 00:29:11.839
pay a settlement to the City of San Diego, right,55400:29:11.920 --> 00:29:15.319
and now they've stopped paying royalties altogether. So I just55500:29:15.400 --> 00:29:17.839
feel like that's a little bit separate thing, where like55600:29:18.039 --> 00:29:20.240
they have a pattern now, an established pattern. So I55700:29:20.359 --> 00:29:21.920
just think that weekends their case, if they go in,55800:29:21.960 --> 00:29:26.839
they will have an established pattern of ignoring I agree, payments.55900:29:26.880 --> 00:29:29.440
And but then the third thing, to your point is like,56000:29:29.680 --> 00:29:31.559
what does this mean for the chain as a whole,56100:29:31.720 --> 00:29:35.000
because some of these places, again I think the Sesame56200:29:35.039 --> 00:29:38.279
thing is what makes it a family friendly offering, and56300:29:39.160 --> 00:29:42.920
the whole Sesame place areas like Philadelphia and San Diego,56400:29:43.759 --> 00:29:47.880
those are big chunks of it. It's not just merchandise,56500:29:47.920 --> 00:29:50.440
I guess in some of these areas.56600:29:50.119 --> 00:29:53.960
It's place necessity. Place parks, the whole park is a56700:29:54.000 --> 00:29:56.079
Sesame theme that's given exactly.56800:29:56.440 --> 00:29:58.759
So that's a big deal.56900:29:59.200 --> 00:30:00.960
That's a big deal. But to also say though that57000:30:01.240 --> 00:30:03.960
in the individual parks that if they got rid of57100:30:03.960 --> 00:30:05.839
the Sesame brand they wouldn't be kid friendly, Well, they57200:30:05.839 --> 00:30:10.079
were kid with what is now Sesame Sesame. The Sesame57300:30:10.160 --> 00:30:13.160
area at Bush Garden, Stampa has always been the kid57400:30:13.160 --> 00:30:15.720
friendly area. It was the it was when I first57500:30:15.720 --> 00:30:18.039
started working there, it was called it was called Dwarf Village,57600:30:18.440 --> 00:30:22.519
the culturally Insensitive Children's play Area, and then and then57700:30:22.519 --> 00:30:25.759
it went to Land of the Dragons, which was also57800:30:26.000 --> 00:30:28.720
not IP supported, and then it went to Sesame. So57900:30:29.119 --> 00:30:31.680
they have the ability to keep it family friendly, but58000:30:31.759 --> 00:30:36.279
they've invested so much in putting capital investment behind the58100:30:36.279 --> 00:30:39.799
Sesame IP that it could be really catastrophic for them.58200:30:40.279 --> 00:30:44.039
I think it's played people that they are playing the58300:30:44.039 --> 00:30:46.519
shell game with their budget and moving money from here58400:30:46.519 --> 00:30:48.400
to there and paying what they can when they can.58500:30:48.960 --> 00:30:53.200
But and I think using the claim that Sesame is58600:30:53.240 --> 00:30:56.640
no longer a viable IP, I don't think that is something.58700:30:56.720 --> 00:30:58.680
I don't think that's a reason to just stop paying.58800:30:58.839 --> 00:31:02.960
I think that is a reason to count or so renegotiation, Yeah,58900:31:03.000 --> 00:31:04.839
renegotiate and we'll see how that. We'll see how that59000:31:04.920 --> 00:31:06.759
all pans out in the end. Speaking of the end,59100:31:07.039 --> 00:31:09.640
we are there. So guys, thank you so much once59200:31:09.640 --> 00:31:12.599
again for watching and listening to us, Yamor and Uh.59300:31:12.680 --> 00:31:14.640
I think we talked about some pretty important stuff and59400:31:14.640 --> 00:31:17.559
hopefully you've got some takeaways. Again, thank you for listening59500:31:17.640 --> 00:31:19.400
on behalf of Philip and myself. This is Green Tag59600:31:19.440 --> 00:31:21.680
Theme Park in thirty and we will see you next week.
